Platforum Roundtable

I went to an excellent Platforum roundtable at City Social recently. It was chaired by Danby Bloch and the topic was “The Future of the Advisory market”. There were a couple of themes that struck me: First, the demand for financial advice still exceeds the supply and that doesn’t seem likely to change for the foreseeable future. Technology will no doubt reduce the cost to serve and may reduce fees. It may also be used to enhance the entire client experience. My own view is that reducing costs should drive higher margins given the demand/supply equation. Of course, good to improve the client experience as well. But why reduce fees?

Another theme was “robo-advisers”. I appreciate that is not an accurate description but you know what I mean. The conclusion was that the cost of engaging new customers is high and not going down. This is why some players have already closed shop and written off significant investments, and others are struggling to get anywhere near profitability. One comment was that these players are more like leprechauns than unicorns. I agree and think that this space will be dominated by organisations who already have customers and/or a strong consumer brand.